WASHINGTON (11/12/14)--A statement meant to "set the tone" for financial institutions serving money services businesses (MSBs) has been released by the Financial Crimes Enforcement Network (FinCEN). Increased regulatory scrutiny is leading to financial institutions moving away from providing services to MSBs, according to FinCEN, which led to a reiteration expectations when it comes to Bank Secrecy Act (BSA) obligations.
MSBs are defined by FinCEN as currency dealers/exchangers, check cashers, issuers, sellers or redeemers of traveler's checks and money transmitters. According to FinCEN, MSBs are losing access to financial services, which may in part be a result of concerns about regulatory scrutiny.
According to its statement, FinCEN "expects banking organizations that open and maintain accounts for MSBs to apply the requirements of the Bank Secrecy Act, as they do with all accountholders, based on risk."
David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Department of the Treasury, spoke on the statement Monday at American Bankers Association/American Bar Association Monday.
"It reinforces the point that banks should not, and need not, engage in the wholesale termination of categories of customer accounts without regard to risk," he said. "To the contrary, the statement emphasizes that banks should assess the risks posed by individual MSB customers on a case-by-case basis, and that with appropriate risk-based controls, banks can manage the risks of MSB accountholders, even those deemed high-risk."
According to Cohen, FinCEN is partnering with states to more effectively allocate resources for MSB examinations. This coordination will be enhanced by the Money Remittances Improvement Act of 2014, which President Obama signed into law in August.
"By authorizing Treasury to rely on financial institution examinations conducted by state supervisory agencies, this Act will improve our ability to focus on higher-risk MSBs," he said.
A public forum on financial services access and MSBs will be held at the Treasury on Jan. 13, 2015. It is designed to allow industry stakeholders and government representatives to discuss challenges and best practices.